Core Viewpoint - Tianwei Food is pursuing a dual listing in A+H shares to enhance its international strategy and brand recognition, despite facing challenges in a competitive domestic seasoning market [3][7]. Company Overview - Tianwei Food has submitted its application for H-share listing to the China Securities Regulatory Commission and has received acceptance [3]. - The company aims to leverage international capital markets to optimize its capital structure and support long-term development [3][8]. Financial Performance - Tianwei Food's financial performance has been volatile, with a revenue of 1.39 billion yuan in the first half of 2025, a decrease of 5.24% year-on-year, and a net profit of 190 million yuan, down 23.01% [4]. - In the third quarter, revenue showed signs of recovery, increasing by 13.79% to 1.02 billion yuan, but the overall performance for the first three quarters still reflected a decline in net profit by 9.3% [4]. - The company reported a compound annual growth rate of 13.5% in revenue from 2022 to 2024, but recent growth rates indicate a downward trend [4]. Market Challenges - The domestic seasoning market has shifted from a blue ocean to a red ocean, with over 1,000 participants in the compound seasoning industry [7]. - Tianwei Food's main product line, hot pot seasoning, has seen a revenue decline of 12.85% in the first half of 2025 [4]. - The company faces competition not only from traditional seasoning companies but also from cross-industry players like grain and oil companies entering the seasoning market [9]. Strategic Moves - Online sales channels have become a bright spot for Tianwei Food, with a 60.27% increase in online revenue to 631 million yuan, contrasting with a 10.35% decline in offline sales [5]. - The company has made significant acquisitions, including a 55% stake in Shicui Food for 362 million yuan, which contributed to its revenue growth [5]. - Tianwei Food plans to use funds raised from the H-share listing for global sales network development and supply chain construction [8]. International Expansion - The company has begun international food safety standard certifications and has products sold in over 50 countries [8]. - The global seasoning market is projected to grow, with the industry size increasing from 857 billion yuan in 2019 to 1,265 billion yuan in 2024, indicating potential for international expansion [7][8]. - However, challenges remain in breaking into mainstream markets outside the Chinese consumer base [8].

Core Viewpoint - The Chinese seasoning market is experiencing significant growth, with the market size expected to reach 498.1 billion RMB in 2024, driven by increasing disposable income, urbanization, and diversification of seasoning products [1][12]. Company Overview - Tianwei Foods, also known as Sichuan Tianwei Food Group Co., Ltd., is focusing on compound seasoning products and has recently submitted an IPO application to the Hong Kong Stock Exchange [1][21]. - The company was listed on the Shanghai Stock Exchange in 2019 and has a current market capitalization of approximately 13.7 billion RMB as of November 20 [1]. Product Categories - Seasonings are categorized into single and compound seasonings, with Tianwei Foods specializing in various compound seasoning products, including hot pot bases and customized sauces [4][5]. - In the reporting period from 2022 to the first half of 2025, recipe-based seasonings contributed over 50% of the company's revenue, while hot pot seasonings accounted for more than 30% [7]. Financial Performance - Tianwei Foods has shown a growth trend in revenue, with figures of approximately 2.68 billion RMB in 2022, 3.13 billion RMB in 2023, and projected 3.45 billion RMB in 2024 [14]. - The company’s gross profit margin has improved from 33.9% in 2022 to 39.4% in 2024, indicating better cost management and pricing strategies [14]. Market Position - Tianwei Foods ranks as the fourth largest compound seasoning company in China, holding a market share of 2.7% in 2024, amidst a competitive landscape with over a thousand market participants [17][19]. - The global seasoning market is projected to grow from approximately 2.14 trillion RMB in 2024 to 2.87 trillion RMB by 2029, with compound seasonings expected to grow at a faster rate due to changing consumer preferences [12]. Sales Channels - The company has expanded its sales channels significantly, with direct sales revenue increasing from 15% to 32.4% due to the development of online sales [10]. - Tianwei Foods has established a nationwide distribution network with over 3,251 distributors and is actively expanding into international markets [9]. Future Prospects - The IPO proceeds are intended for brand building, expanding sales networks, enhancing supply chain capabilities, and increasing product innovation [23]. - The compound seasoning market in China is still in its early development stage, suggesting potential for future growth as consumer preferences evolve [17].

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Insights - The company's total revenue for the first three quarters of 2025 reached 2.411 billion yuan, representing a year-on-year increase of 1.98%. However, the net profit attributable to the parent company was 392 million yuan, down 9.3% year-on-year. The third quarter alone saw revenue of 1.02 billion yuan, up 13.79% year-on-year, with a net profit of 202 million yuan, an increase of 8.93% year-on-year [2][4][10]. - The company has shown a significant increase in online sales channels, with online revenue growing by 60.27% year-on-year, while offline sales decreased by 10.35% [10]. - The company maintains a stable profitability, with a gross profit margin of 39.44% for the first three quarters, slightly up by 0.16 percentage points year-on-year. The net profit margin decreased by 2.02 percentage points to 16.27% [10]. Summary by Relevant Sections Financial Performance - For the first three quarters of 2025, the company reported total revenue of 2.411 billion yuan, with a net profit of 392 million yuan, reflecting a decline in profitability compared to the previous year [2][4]. - In Q3 2025, the company achieved a revenue of 1.02 billion yuan, marking a 13.79% increase year-on-year, and a net profit of 202 million yuan, which is an 8.93% increase year-on-year [2][4]. Revenue Breakdown - Revenue from hot pot condiments was 806 million yuan (up 1.59% year-on-year), while Chinese cuisine condiments generated 1.339 billion yuan (up 5.26% year-on-year). However, sausage and cured meat condiments saw a decline of 27.87% to 158 million yuan [10]. - Online sales channels contributed 631 million yuan, showing a remarkable growth of 60.27% year-on-year, while offline sales totaled 1.764 billion yuan, down 10.35% [10]. Profitability Analysis - The company's net profit margin for the first three quarters was 16.27%, down 2.02 percentage points year-on-year, while the gross profit margin increased to 39.44% [10]. - In Q3 2025, the net profit margin was 19.81%, a decrease of 0.88 percentage points year-on-year, with a gross profit margin of 40.46%, up 1.63 percentage points year-on-year [10]. Growth Strategy - The company is focusing on external growth as a key strategy, with successful acquisitions enhancing its product innovation and market presence. The expected EPS for 2025 and 2026 are 0.57 yuan and 0.63 yuan, respectively, with corresponding PE ratios of 23 and 21 times [10].

Core Viewpoint - Tianwei Food (603317.SH) has recently filed for an IPO in Hong Kong, highlighting its status as the fastest-growing company among China's top five compound seasoning companies over the past three years, although signs of growth fatigue are emerging due to reliance on external acquisitions [1][2]. Group 1: Company Overview - Tianwei Food, headquartered in Chengdu, Sichuan, specializes in hot pot condiments, recipe-based seasonings, and sausage and cured meat seasonings, with brands including "Hao Ren Jia," "Da Hong Pao," "Tian Che," "Tianwei Food Catering High-end Customization," "Shi Cui Fang," and "Jia Dian Zi Wei" [2]. - As of 2024, Tianwei Food is projected to achieve revenue of 3.476 billion yuan and a net profit of 625 million yuan, marking new highs since its listing [2]. Group 2: Acquisition Strategy - The company has pursued external growth through acquisitions, including a 55% stake in Sichuan Shicui Food Co., Ltd. for 362 million yuan, which primarily serves B-end clients in the restaurant sector [2][3]. - Following the acquisition of Shicui Food, Tianwei Food acquired a 63.84% stake in Hangzhou Jia Dian Zi Wei Technology Co., Ltd., which specializes in compound seasonings and has seen significant revenue growth [3]. Group 3: Financial Performance - Despite the revenue boost from acquisitions, Tianwei Food reported a decline in both revenue and net profit in the first half of 2025, with revenue of 1.391 billion yuan (down 5.24%) and net profit of 190 million yuan (down 23.01%) [4]. - The company's operating cash flow also decreased significantly, dropping 44.89% year-on-year to 164 million yuan in the first half of 2025 [4]. Group 4: Market Challenges - Tianwei Food faces a competitive landscape in the seasoning market, with over 1,000 participants and more than 500 competitors in key segments like recipe-based and hot pot seasonings [5]. - The overall market for seasoning products has stabilized, with a compound annual growth rate of only 2.5% over the past five years, raising questions about the sustainability of Tianwei Food's growth through acquisitions [5].

Core Viewpoint - The company, Tianwei Foods, is aiming for a dual listing in Hong Kong (A+H) after successfully going public in A-shares, leveraging its strong market position in the condiment industry while facing challenges such as slowing growth and market competition [1][4][11]. Group 1: Company Overview - Tianwei Foods started as a small condiment shop in Chengdu and has grown into a leading player in the hot pot base market, integrating well-known brands like "Hao Ren Jia" and "Da Hong Pao" [1][4]. - The company was established in 2007 and became the first A-share listed company in the hot pot base segment in 2019, now targeting a second A+H listing [4][11]. - The founders, Deng Wen and Tang Lu, maintain significant control over the company, holding a combined 65.32% of shares in A-shares and approximately 74.64% voting rights in the Hong Kong listing [8][9]. Group 2: Financial Performance - For 2024, the company expects revenue of 3.476 billion yuan, with a slight growth of 1.98% year-on-year for the first three quarters of 2025, while net profit decreased by 9.3% [4][11]. - The main revenue driver is recipe-style condiments, contributing 1.339 billion yuan, accounting for 55.53% of total revenue, with a growth of 5.26% [4][11]. - Online sales have surged by 60.27%, reaching 631 million yuan, while offline sales have declined by 10.35% [5][11]. Group 3: Market Position and Challenges - Tianwei Foods is the largest recipe-style condiment company in China with a market share of 9.7% and the second-largest hot pot condiment company with a 4.8% market share [9][11]. - The company faces challenges such as slowing growth, reliance on a narrow product range, and limited international market presence, primarily focusing on Southeast Asia [9][11]. - The upcoming Hong Kong listing aims to raise funds for marketing, expanding sales networks, and product development to overcome growth limitations [9][12].

Core Viewpoint - Tianwei Foods, known as the "first stock of Sichuan hot pot seasoning," is facing significant financial and operational pressures, leading to a decline in performance and a need for strategic adjustments [1][3][24]. Financial Concerns - Tianwei Foods has experienced a slowdown in revenue growth, with a reported revenue of 13.73 billion yuan in the first half of 2025, a decrease of over 800 million yuan year-on-year [3][4]. - The company's net profit for the first three quarters of 2025 was approximately 3.92 billion yuan, down 9.3% year-on-year, indicating a troubling trend of "increased revenue without increased profit" [4][5]. - Operating cash flow has significantly decreased, with a net cash flow of about 1.63 billion yuan in the first half of 2025, a drop of 44.55% compared to the same period in 2024 [5][8]. Operational Adjustments - The company is heavily reliant on a few major products, particularly hot pot base and sauerkraut fish seasonings, which raises concerns about product dependency [17][24]. - Despite a 60% increase in online revenue, offline sales have dropped by 10%, highlighting a significant channel imbalance [12][13]. - The number of distributors has increased from 3,017 to 3,278, but this has not translated into higher offline sales, indicating potential issues in distributor relationships [14][15]. Market Position and Competition - Tianwei Foods holds a market share of 9.7% in the recipe-style seasoning market and 4.8% in the hot pot seasoning market, making it a significant player in these segments [11]. - However, the company faces increasing competition from numerous rivals, including Hai Di Lao and other established brands, which is putting pressure on its market position [18][24]. Strategic Direction - The company plans to use funds from its IPO for investments, expansion, and overseas market development, but there are concerns about the feasibility of these plans given the current cash flow situation [20][21]. - The high concentration of shareholding, with the controlling family holding over 74%, raises concerns about potential sell-off risks post-IPO [22][24].

Core Insights - The company reported a revenue of 2.411 billion yuan for the first three quarters of 2025, representing a year-on-year growth of 1.98%, while the net profit attributable to shareholders decreased by 9.30% to 392 million yuan [1] - In Q3 2025, the company achieved a revenue of 1.020 billion yuan, a year-on-year increase of 13.79%, and a net profit attributable to shareholders of 202 million yuan, up 8.93% [1] Revenue Breakdown - For the first three quarters of 2025, offline and online channels generated revenues of 1.764 billion yuan and 631 million yuan, respectively, with year-on-year changes of -10.35% and 60.27% [2] - In Q3 2025, offline and online revenues were 790 million yuan and 223 million yuan, showing year-on-year growth of 4.47% and 60.56% [2] - Revenue by product category for the first three quarters included hot pot condiments at 806 million yuan (up 1.59%), recipe-style condiments at 1.339 billion yuan (up 5.26%), sausage and cured meat condiments at 158 million yuan (down 27.87%), and others at 91 million yuan (up 20.01%) [2] Profitability Metrics - The gross profit margin for the first three quarters of 2025 increased by 0.16 percentage points to 39.44%, with Q3 gross margin rising by 1.63 percentage points to 40.46% [3] - The net profit margin attributable to shareholders decreased by 2.02 percentage points to 16.27% for the first three quarters, while the adjusted net profit margin fell by 1.63 percentage points to 14.81% [3] Strategic Developments - The company acquired a 55% stake in Yipin Weixiang in September 2025, which is expected to enhance its ready-to-eat sauce product line and leverage the acquired company's established R&D capabilities and production experience [4] - Revenue projections for 2025 to 2027 are estimated at 3.617 billion yuan, 3.889 billion yuan, and 4.165 billion yuan, with respective year-on-year growth rates of 4%, 8%, and 7% [4]

Investment Rating - The investment rating for Tianwei Foods is maintained at "Outperform" [1] Core Views - The company's Q3 2025 revenue and net profit slightly exceeded expectations, with revenue of 2.41 billion and net profit of 390 million, reflecting a year-on-year change of +2.0% and -9.3% respectively. Q3 alone saw revenue of 1.02 billion and net profit of 200 million, with year-on-year changes of +13.8% and +8.9% respectively [1][2] - The forecast for net profit from 2025 to 2027 is adjusted to 610 million, 680 million, and 750 million respectively, with corresponding PE ratios of 21.0, 18.7, and 17.0 times [1] Revenue and Profit Analysis - Q3 2025 revenue growth was driven by various product categories, with base sauces, recipe-style seasonings, and others growing by +25.0%, +14.9%, and +121.1% year-on-year respectively. However, sausage and cured meat seasonings saw a decline of 22.2% due to seasonal sales patterns [2] - Online channel revenue grew significantly by 60.6% year-on-year, while offline channels saw a modest increase of 4.5% [2] - Regional performance showed declines in the western and central regions, while eastern, southern, and northern regions experienced revenue growth of 45.6%, 20.9%, and 13.0% respectively [2] Margin and Expense Insights - Gross margin improved by 1.6 percentage points to 40.5%, while net margin decreased by 0.5 percentage points to 20.7% year-on-year. On a quarter-on-quarter basis, gross margin increased by 3.5 percentage points [3] - Overall expense ratio increased by 1.4 percentage points year-on-year, primarily due to a rise in sales expense ratio, which increased by 3.1 percentage points to 10.9% [3] Strategic Outlook - The company is expected to solidify its position in the C-end channel while focusing on the small B channel. The completion of acquisitions such as Shicui and Jiadian Zhiwei is anticipated to enhance channel capabilities, supporting rapid revenue growth during peak seasons [4] - There is an expectation for the company to reduce expenses in traditional supermarket channels while increasing investment in small B channels, aiming for gradual volume growth in these areas [4]

Investment Rating - The report maintains a "Strong Buy" rating for Tianwei Foods (603317.SH) with an expected EPS of 0.57 CNY and 0.66 CNY for 2025 and 2026 respectively, corresponding to a valuation of 20X for 2025 [1][3]. Core Insights - The company reported a revenue growth of 13.79% and a net profit growth of 8.93% year-on-year for Q3 2025, exceeding expectations. The internal business continues to improve, and the growth trend for the acquired brands, including Shicui and Jiadian Zhiwei, remains strong [1][6]. - Despite potential revenue growth slowing down in Q4 due to high base pressure, overall profitability is expected to improve due to cost benefits and expense optimization [1][6]. - The company is committed to maintaining high dividends, with expected dividends over the next three years likely to remain at a high level [1][6]. Financial Performance - For Q3 2025, Tianwei Foods achieved a revenue of 1.02 billion CNY, with a year-on-year increase of 13.79%, and a net profit of 202 million CNY, up 8.93% year-on-year. The cash collection for Q3 was 1.142 billion CNY, reflecting a 13.88% increase [1][6]. - The gross margin for Q3 2025 was 40.46%, an increase of 1.63 percentage points year-on-year, primarily due to a decline in raw material costs [1][6]. - The company’s total revenue for the first three quarters of 2025 was 2.411 billion CNY, a year-on-year increase of 1.98%, while the net profit was 392 million CNY, down 9.30% year-on-year [1][6]. Business Segmentation - In Q3 2025, the hot pot seasoning business saw a revenue increase of 24.96%, driven by new product launches and contributions from acquisitions. The recipe-based seasoning revenue grew by 14.95%, with Shicui continuing its rapid growth [1][6]. - Online sales channels experienced a significant growth of 60.56% year-on-year, while offline channels improved by 4.47% compared to the first half of the year [1][6]. - The company has expanded its product line by acquiring a 55% stake in Shandong Yipin Weixiang, entering the compound seasoning market [1][6].

Core Viewpoint - The company Tianwei Foods reported a slight increase in revenue for the first three quarters of the year, but its net profit declined year-on-year, indicating mixed performance in the market [1][2]. Group 1: Financial Performance - For the first three quarters, Tianwei Foods achieved a revenue of 2.411 billion yuan, a year-on-year increase of 1.98%, while the net profit attributable to shareholders was 392 million yuan, a year-on-year decrease of 9.3% [1]. - In Q3 alone, the company generated revenue of 1.02 billion yuan, reflecting a year-on-year growth of 13.79%, with a net profit of 202 million yuan, up 8.93% year-on-year [1]. - The adjusted net profit after excluding non-recurring items for the first three quarters was 357 million yuan, down 8.13% year-on-year [1]. Group 2: Revenue Channels - Online sales were the main driver of revenue growth, with online channel revenue reaching 631 million yuan, a year-on-year increase of 60.27%, while offline channel revenue was 1.764 billion yuan, down 10.35% [1][2]. Group 3: Product Categories - The hot pot seasoning category saw a recovery in Q3, with revenue of 806 million yuan for the first three quarters, a year-on-year increase of 1.59%, and Q3 revenue of 379 million yuan, up 24.96% [2]. - The sausage and cured meat seasoning category, however, experienced a decline, with revenue of 158 million yuan, down 27.87% year-on-year [2]. Group 4: Regional Performance - The eastern region emerged as the main growth driver, with revenue of 646 million yuan for the first three quarters, a year-on-year increase of 35.56% [2]. - The southern region reported revenue of 245 million yuan, up 4.92% year-on-year, while the western region, the company's base, saw revenue of 814 million yuan, down 3.71% [2]. - The northern and central regions experienced revenue declines of 13.14% and 14.75% respectively [2]. Group 5: Distributor Network - The number of offline distributors continued to expand, reaching 3,278 by the end of Q3, an increase of 261 from the beginning of the year, with the eastern region contributing 116 new distributors [2]. Group 6: Market Expansion - Tianwei Foods has submitted an application for a Hong Kong stock listing, indicating its plans for market expansion [3].